Sergio MassaMinister of Economy, anticipated from Washington that next Monday the Government will initially present the “agro dollar” in the framework of a monetary stabilization plan, with which they intend to simplify exchange rates for products of the agro-export industry. In addition, an attempt will be made to lower the prices with which products and services are imported, impacting on the so-called Tourist, Coldplay, and Qatar dollars, mainly, which have undergone a great advance in recent days.
In this framework, the “soybean dollar 3″ will be in force from April with an exchange rate that is still being worked on. And then it will be extended for 3 months from May to regional economies such as peanuts, rice and viticulture, export products that, unlike oilseeds, do have a domestic market. This special quotation scheme for the export of these products will also be defined in the coming weeks.
To date, Economy finds itself with great concern about the few reserves held by the Central Bank despite the recent agreement between the national government and the IMF, which allowed a modification to the scheme of foreign currency accumulation goals contemplated within the Extended Fund Facility (EFF) program. Thus, the collection perspective is less demanding for the remainder of the year, which is profoundly affected by the severe drought that harmed agricultural production.
“It is an export increase program that aims to facilitate the capacity and compliance with the contracts of our exporters in the year of drought, understanding the difficulties that our producers suffered,” Massa said in a meeting with Argentine journalists on the day of completion of his tour of the US capital, during which he met with the IMF and several Biden administration officials.
What is the farm dollar?
The new measure is a generalization of the scheme known as “soy dollar”, which in this new plan will be extended to sectors with “low or no impact on the domestic market”.. It is expected that, during this weekend, the Government will hold dialogue with various participants in the commodity sector in regional economies of Argentina that could be benefited by the plan.
“The challenge has to do with beginning to travel a path of simplification would change so that everything that appears as a Coldplay dollar, a techno dollar, begins to work and operate in a more unified scheme,” said the Economy leader.
The Government returns to bet on soybeans to get dollars.
In this sense, what the Government intends is to launch a process of ordering the exchange scheme that can be reviewed in June, a coherent time horizon to contemplate the effects of the new soybean dollar.
Plans to increase reserves
During this last visit to the United States, the Argentine delegation gave the IMF projections based on savings of some US$4,000 million in the energy sector thanks to annualized sales with winter values from the European market and the new Néstor Kirchner gas pipeline. that would bring an increase in foreign currency to Argentina, reaching a collection of up to US$15,000 million between the second and third quarters of 2023.
There is also the possibility of expand credit lines with a ceiling of US$3,000 million from three multilateral agents, which are the world Bank (BM), el BID and the CAF. And this disbursement will depend on the administration of the current US president so that, from Washington, support is granted to our country.
Will the scope of one soybean dollar 3 allow us to reach the elections calmly?
Joaquín Arregui, financial advisor at Extensio Finanzas, tells iProfessional that with only 4 and a half months left for the PASO, the Government could arrive by turning off the tap on imports or with a soybean dollar 3 whose objective would be to obtain US$4,000 million, approximately. But with a 30% issue or debt to cover the gap between what it pays to exporters and what it charges to importers to get rid of the US currency.
“He opted for a measure that, although it is extremely detrimental to the economy, for an amount equivalent to 30% of what was collected, allows him to have a social peace until the elections“says the specialist.
For his part, the economic consultant Jorge Neyro maintains to iProfessional that it is very difficult to specify at this moment if this will be enough or not to arrive without failing before the vote. However, he acknowledges that Massa’s management is dedicated to reach PASO without devaluing the official exchange rate and this generates weakness because it is only about “arriving to arrive”, at any cost.
The Central Bank suffered a worrying drop in reserves throughout March.
Despite this, the analyst recognizes a certain positive aspect: “In the short term we may accumulate reserves, but then the influx of the agricultural dollar will end and we will again see a cannibalization of foreign currencyand it is even likely that another soybean dollar will have to be taken out of the galley”.
Could this measure strengthen the Massa administration?
Arregui affirmed to this medium that the new soybean dollar could only be seen as a temporary strengthening of the massista management perceived by those who have no knowledge of economic matters, since it is a short-term and very harmful measure.
And he concludes by noting that the Central Bank today has negative net reserves because of soybean dollars 1 and 2, launched earlier by the same Minister of Economy.
